AUTOMOTIVE MULTIMEDIA AND COMMUNICATIONS

Detailed system and semiconductor demand analysis for in-vehicle infotainment, telematics and vehicle-device connectivity features.

June 15, 2014 13:51 rlanctot

American Honda Motor (AHM) is said to be investing “millions of dollars” in an effort led by a music industry “dream team” to launch a massive youth marketing initiative called “Honda Stage.” The “multi-platform” agenda is billed as a “bold shift in brand advertising and experiential marketing” to reach the “youth market.”

You can get the details here: http://tinyurl.com/mgjgob6

The goal of the program is to provide one-of-a-kind curated music content live and online through “hundreds of pieces of exclusive online videos, news, interviews and performances” through a dedicated Honda Stage Youtube channel. Run from the marketing side of Honda, the plan is no doubt intended to generate leads to sell Honda cars. What is missing is a delivery platform for Honda Stage content in Honda vehicles.

Honda is intending to make Honda Stage content available via iHeartRadio and the iHeartRadio app, but the company is definitely missing a chance to redefine the entire car radio experience. With the onset of satellite radio (ie. Sirius XM) and IP-based radio (ie. Tunein Radio and Harman’s Aha, and Panasonic’s Aupeo!) an opportunity has emerged for car companies to brand and customize the radio experience in the car.

Broadcast industry executives such as Steve Goldstein, vice president of Saga Communications, have lamented (Goldstein blog: tinyurl.com/lw9vmyu) their inability to find the traditional radio dial in new app-equipped cars. In some cars (in the U.S.), it is easier to find the iHeartRadio app than it is to find local AM/FM radio stations.

The time has arrived for car makers to take over the content management proposition in the car and create their own branded radio experiences.  With Honda Stage, AHM has the opportunity to take that bold step.  Instead of offering iHeartRadio, Tunein Radio and Aha, Honda can combine all of these radio experiences into a single Honda-branded solution.

A Honda-branded radio in the car could offer a complete content management solution for news, radio, sports, weather, traffic and music along with a channel for communicating important Honda-related news such as new vehicles, new financing, new service options, new apps or even urgent vehicle recall messages.  A partner like Harman’s Aha or Panasonic’s Aupeo! could help create a customized user experience with self-curating customer facing controls.

With Honda Stage, Honda is tearing a page from the Sirius XM playbook.  Sirius XM has been able to build a base of 25M+ subscribers on a combination of unique content, ease of use and subsidized relationships with auto makers.  Honda Stage will have its own unique content which it can combine with the content provided by its partners.  A Honda-branded radio will allow the company to control the display-based delivery platform in its cars enabling a unique curated experience.

I know why Honda has not taken this bold step.  The marketing department operates independently of the engineers actually designing the cars and infotainment systems.  Marketing and engineering simply do not coordinate their activities very effectively at Honda or any other car company.

The marketing departments of car companies typically have completely different objectives from the infotainment system design teams.  And marketers also often fail to grasp the privacy concerns of drivers relative to the priorities of Website visitors.

While Honda Stage can be expected to deliver some excellent lead generation for Honda dealers via tracking customer visits to Google-owned Youtube.com, it is missing a chance to close the loop with Honda vehicles.  The problem, of course, has to do with the fact that Honda will want to create and control an in-car Honda-branded radio experience.  Honda will not want Google tapping into its customers’ in-vehicle content and advertising consumption and exposure.

According to recent Strategy Analytics research, customers in cars are much less interested in being tracked than they are when online outside the car.  For that reason, Honda and other car companies, will want radio partners that protect privacy.

Honda says the Honda Stage program will be promoted on air and online across Clear Channel radio stations and through iHeartRadio and will deliver regular live interviews and in-studio performances on the Honda Stage, broadcast on REVOLT TV, the iOS and Android REVOLT apps and the Honda Stage YouTube Channel.

But Honda is missing a beat if it does not seize this extraordinary opportunity to create an in-vehicle, over-the-top branded radio experience designed to aggregate the existing IP radio experiences in its cars and leverage its unique, sponsored Honda Stage content and other brand-related communications.  A Honda-branded radio will allow Honda to redefine and enrich its customer engagement with a value-added, customized and personalized content delivery platform – simplifying the icon-based, app-oriented offering currently delivered via AcuraLink and HondaLink.

And, of course, the same hold true for every other car maker.  Chevy Radio?  Tesla Radio?


June 8, 2014 19:18 rlanctot

It has become fashionable in the auto industry to promise to protect customer privacy. Volkswagen’s Chairman of the Board of Management Martin Winterkorn pledged to do just that in a speech before the CeBIT fair in Hannover, Germany, earlier this year. But he was speaking for the entire industry. Car makers want to be perceived as protecting customer information and the security and privacy of the vehicle ownership experience.

The reality is precisely the opposite of these pledges. Car makers and their owned and franchised dealers routinely mine their customer data for valuable nuggets regarding shopping and buying behavior, vehicle ownership, credit scores, service history and anything else they can access.

The ignition switch recall plaguing GM highlights the twisted priorities of the car makers when it comes to the way they handle customer data vs. the manner in which they handle vehicle data. Customer data is more or less freely accessed and traded but vehicle data is guarded and walled off from even internal access at some car makers – but at GM in particular.

The so-called “Valukas Report,” named for report author, Anton Valukas, Chairman of Jenner & Block, a law firm representing GM, notes a culture of don’t-ask-don’t-tell at GM with regard to vehicle data. (Redacted report: http://tinyurl.com/l4htcq5) But the situation is even worse than these findings suggest. Investigators (and even internal GM users) have struggled over the years and even to this day to pry data out of GM’s OnStar division.

Seventeen years after OnStar’s founding president, Chet Huber, set the tone for protecting customer data accessed by OnStar, the division continues to guard both customer and vehicle data long past the point at which it is prudent to do so.  It is time to recognize that vehicle connectivity is no longer about automatic crash notification. 

The connected car has come to be defined by an experience enriched by the visibility of vehicle data to analytics for diagnostics, location awareness, driver behavior and, above all, safety.  It is a time for a change in privacy policy and that change can take one of five paths:

  1. Government mandated and centralized data sharing for the purpose of enhancing traffic and transportation data, improving vehicle safety, road use taxation, and mitigating driver distraction, harmful emissions and overall highway congestion.

  2. OEM-enabled customer opt-in scenarios with appropriate transparency and data access along with customer control.

  3. Independent third-party access (ie. Google, Verizon, Apple, Amazon, AT&T, State Farm, Allstate, etc.) for commercial purposes – contextual advertising, connected insurance, e-commerce, etc.

  4. A hybrid of the above scenarios.

  5. Complete data shut down.

There is little doubt that consumers and auto makers would prefer to keep the government out of the connected car business.  So let’s assume that the most palatable option is #2 – OEM-managed data gathering, interpretation and commercialization.

If OEMs are going to manage all access to vehicle data (aside from EDR data which is always subject to subpoena) then it is time to define the architectures to enable data gathering and identify the types of data that will be gathered.  In light of GM’s ignition switch recall, auto industry executives in the future will have a difficult time arguing that they did not know about a particular flaw in their vehicles, especially if the flaw was contributing to fatalities.

Connected car technology confers an obligation on auto makers to scrutinize their vehicle data to diagnose and anticipate vehicle failures.  Unbeknownst to GM, the company arguably lost its ability to look the other way 17 years ago with the launch of OnStar.

As more car makers follow GM along the path of connectivity, the expectations of consumers will increase along with their willingness to share data.  In a recent Strategy Analytics survey of consumer sentiment regarding privacy, respondents universally supported sharing their data if it meant that it would enhance safety.

Car makers that insist on protecting customer privacy – along with vehicle data security – will find themselves on the wrong side of history, if not on the wrong side of an investigation.  The moral of the story is clear:  Safety trumps privacy in the auto industry.


June 7, 2014 15:23 rlanctot

I just returned from Telematics Update 2014 in Detroit – the leading global event focused on vehicle connectivity – and I came upon a story on thecarconnection.com regarding a recall on the 2013 Lexus GS350. (You can find the details here: http://tinyurl.com/pd5xkd6) These cars are braking unexpectedly and Lexus is encouraging customers to bring their cars in for a fix … when the parts are available. The thought suddenly popped into my head: What would Tesla do?

The reason I suddenly asked myself this question derived from the following sentence in the online story:

“Owners will receive a letter from Lexus when they are ready to recall the vehicles involved.”

So, let me get this right, the cars can brake unexpectedly. Owners are being notified of this issue by MAIL and will have to wait for the parts.

The automotive industry needs a new standard for customer service and customer communications as well as a better understanding of what a recall is and means. Given Tesla’s recent history of time-warping reactions to vehicle problems and paradigm-shifting customer engagement I think it is fair to say that a good measure of future handling of vehicle failure crises will be to ask: What would Tesla do? (There is a corollary: What would Elon do? – but let’s not get too personal about this.)

#1  A recall is by definition an immediate, vehicle safety issue.  Under such circumstances, the postal service will not cut it as a means of customer communication – especially in the event of a vehicle with an on-board modem.  Lexus vehicles are equipped with a system called SafetyConnect.  This system should be used to communicate directly with the customer – and the customer shouldn’t have to pay for that service.

#2  The customer has rights and should be made aware of those rights and choices.  If the customer is uneasy driving a car with an outstanding recall, the option of a loaner vehicle should be made available.  And notification of the potential failure and recall does not release the car maker from responsibility and liability.

Given the recent wave of recalls sweeping the auto industry in the wake of GM’s ignition switch failure crisis, the value of an embedded telematics system in a car has been turned on its head.  No longer will drivers count on OnStar (or a like system) to save them when a vehicle crashes.  The new paradigm will be for car makers to use OnStar-like systems to contact their customers in advance to warn them of a potential vehicle failure.

The good news for the industry is that recall notifications are yet another powerful reason for cars to be connected and for those connections to be always live.  Tesla understands this and, for now, is providing an always live connection to its cars at no charge.

So, next time a car maker has a recall, or spontaneous vehicle fire, or unexplained failure, or has a newly discovered and potentially life-threatening flaw, the executives at the helm must ask themselves:  What would Tesla do?


May 30, 2014 09:40 rlanctot

Three years after I wrote this blog (Me, OnStar and Irene - http://tinyurl.com/n7sccck), and nine years after Katrina OnStar has notified all current and former subscribers that it will offer its Crisis Assist services to all of its customers for free regardless of their subscription plan in the event of an extreme weather emergency. OnStar actually went futher nine years ago during Katrina but refused to make a public announcement of the offer, in spite of the pleas of state attorneys general (see blog).

Crisis Assist is part of OnStar's premium navigation services.  Crisis Assist allows OnStar to provide customers with complimentary hands-free calling minutes to that people can reach loved ones or authorities when communications are down.

The decision by OnStar only partially fulfills the recommendation that I made three years ago, to make OnStar resources more widely available to public authorities and the media during severe weather events. During hurricanes in the U.S., television stations pre-empt their regular broadcasts to bring a steady stream of storm updates to viewers.

During these broadcast periods the networks are desperate for new information and perspectives on the storm and it is my belief that OnStar is in a unique position with a regional view of the event and the emergency response to enhance the public communication. OnStar says the National Oceanic and Atmospheric Administration is predicting a 70 percent chance of eight to 13 named storms occurring during the season, three to six of which could become hurricanes.

The Atlantic hurricane season typically runs from June 1-Nov. 30 and includes coastal regions of the Atlantic Ocean, Gulf of Mexico and Caribbean Sea. OnStar says approximately 1.1 million of its subscribers live within this area. (Strategy Analytics believes there could be twice as many inactive OnStar systems in the area capable of delivering urgent assistance during a crisis if OnStar were to re-activate the service during an emergency as it has in the past.)

The move is an excellent public service for OnStar - though the company may be missing a chance to restore old connections by offering it to customers with expired subscriptions. The decision also touches a nerve in the automobile club community.

During hurricanes, AAA becomes a dominant resource on television broadcasts offering guidance and advice to members and non-members alike. I still believe there is an opportunity for OnStar to play a similar, high profile role.

I mention this automobile club vs. telematics service provider proposition because automobile clubs around the world are increasingly seeing telematics service providers as direct competition. The emergence of smartphones and mobile navigation have put huge pressure on the trip planning value proposition offered by auto clubs and the roadside assistance element of telematics has cut into the auto club towing franchise.

In Europe, auto clubs are maneuvering to insist on the legal right to equal access to vehicle data and customers via eCall and telematics systems. In other words, the auto clubs want open access to emergency communications from connected cars so they can have a shot at related towing and roadside assistance opportunities.

In the U.S., AAA has yet to take the open telematics data access tack, but the organization is under pressure from emergence of smartphones and embedded telematics systems. AAA chapters around the U.S. have pursued varying strategies to connect with customers including the introduction of smartphone apps and aftermarket OBDII devices and even legislation (in California) governing customer privacy.

Meanwhile, OnStar with its 6m+ subscribers and geospatial assets and call centers can perform a huge public service by making its resources available to broadcasters – even if some might perceive the gesture as self-promotion. Is self-promotion wrong if it saves lives?

The OnStar announcement is another important communication and brand statement around safety.  It also points out the value of sharing information.  Customers overly concerned with privacy may cut themselves off from a lifesaving service.

It is not clear how the auto clubs’ demands for open access to urgent vehicle communications will play out in Europe or whether AAA’s aftermarket plays will work. But if car makers like GM/OnStar are proactive in sharing data that is of critical importance to the public and emergency responders, the issue will be rendered moot.


May 12, 2014 15:46 rlanctot

Auto insurers are desperately seeking a technology edge, which is why so much attention has been focused on usage-based insurance.  Seen by many as a paradigm-shifting silver bullet for insurance underwriting, usage-based insurance has become the conventional wisdom industry mantra for the next big thing.

The only problem with this next big thing in car insurance is that it continues to experience a failure to launch even as pilot programs multiply around the world and existing programs continue to add thousands of users.  The key problem facing the industry is that the ranks of new subscribers are coming on board in the thousands, not the hundreds of thousands and certainly not in the millions.

The latest event held to confront this conundrum was Insurance Telematics Europe, held in London just last week.  All of the attendees and presenters agreed that there is a huge opportunity in connecting to customers to deliver insurance programs based on vehicle usage, but it seems that no one could agree on the means to achieving a mass market.

One salient point did emerge, however, and that is that consumers seeking the least expensive insurance programs are more likely to find the very cheapest rate in a conventional program than from a usage-based program.  This means that consumers are still subsidizing the cost of connectivity for insurance without a demonstrable value proposition.

Nowhere in the world is this issue more pronounced than in the U.K. where 10 auto insurance comparison sites and more than 130 auto insurances compete for the attention of the driving public.  And on all those Websites – Confused.com, TescoCompare, MoneySupermarket, ComparetheMarket, GoCompare, USwitch, etc. – the lowest quotes are for conventional insurance offers.

The most recent entrant in the insurance comparison site game in the U.K. is Google (www.google.co.uk/compare/carinsurance) which is planning a Q4 launch in the U.S.  Google will join Walmart which just launched an insurance comparison shopping offer in cooperation with AutoInsurance.com. 

In addition to car insurance comparison shopping sites, insurers continue to seek alternative sources of data suitable for underwriting:

  • Cannot consider income, race or religion

  • May consider occupation, education - but consumer advocates are concerned that these not become “surrogates” prejudicial to protected classes of consumers

  • Research shows consumers with less education, lower paying jobs getting quoted higher rates

  • Permissible: zip code, age, driving record, mileage, car make and model, marital status, gender (not in Europe!)

  • Voting records? – a correlation to more or less claim filing exists

  • Price optimization based on shopping patterns

This last proposition – price optimization based on shopping patterns – may be a key justification for Google’s interest in the market.  Google is also no doubt interested in capturing as much of the insurance shopping traffic as possible leveraging its role as an impartial service provider. 

Many of the comparison sites in the U.K. are owned or co-owned by insurers directly.  So Google separates itself with superior or more transparent privacy protection and advanced analytics intended to better refine the process of quoting insurance which, in the U.K., is a delicate process of in a highly competitive market.

Meanwhile, at the Insurance Telematics event, attendees agreed, based on on-site surveys as well as survey data presented, that consumers of car insurance are looking for a 50-100£ discount before jumping to a UBI offer (for consumers other than young drivers paying thousands of £’s).  This is the single greatest barrier to acceptance in the broader market.  But speakers at the event chose not to address this.

Most of the speakers at the event focused overwhelmingly on the value of usage-based insurance to the insurance companies.  Insurers using so-called “black box” insurance have an advantage in obtaining first notice of loss (FNOL), collecting forensic information on the driver and vehicle performance, and more closely and accurately evaluating driver behavior.

Insurers using black box insurance programs are also in a privileged position for selling value-added services (automatic crash notification, roadside assistance, stolen vehicle tracking and recovery), “stealing” customers from competitors and retaining customers – ie. reducing churn.  Insurers already using black box insurance programs believe that adverse selection (ie. the movement of the best drivers with the lowest risk into UBI offerings) will eventually drive the entire market toward connected solutions.

But if consumers have to pay more for connected UBI programs, they are not likely to perceive paying a lower premium as adverse selection.  The further challenge to broad acceptance of UBI programs are significant regional differences around the world.

In many European countries, most notably Germany and the U.K., annual premiums are well below $1,000 with exceptions only for younger drivers.  The best markets for UBI programs are the U.S., Italy and South Africa or any market where annual rates have hit onerous levels - >$1,000/year.

But even in Italy some of the leading insurers are charging a premium for UBI program participation, rather than offering a discount.  There is an irony, here, in that the Monti Decree passed more than two years ago and regulating car insurance was intended to ensure that all car insurers offered a black box usage-based program that was no more expensive than a non-UBI program with the same coverage.

But insurers in Italy, such as Generali, are offering UBI programs as a value-added service.  As a result the UBI offer in Italy, as elsewhere, is not the cheapest offer on the block.

This has to change.  For UBI to achieve acceptable levels of adoption and scale it must become the cheapest offer in the kit and available to all.  The value to the insurer, as noted earlier, is well beyond the perceived or justifiable value to the consumer.  Even in the U.S.where car insurance is expensive, UBI programs are mainly offered to new customers while existing customers are told they already have the best rate.  UBI is usually only offered to existing customers when they threaten to change carriers.

Progressive Insurance is probably the only company embracing UBI in a brand defining manner with its SnapShot offer in the U.S.  Elsewhere in the world, usage-based insurance offerings are capturing much less interest.

But even Progressive has not embraced UBI as an offering for MOST of its customers and the promotion has been inconsistent, with the company trying a range of different messages with varying results.  In addition, Progressive has taken the extreme low cost approach to UBI, eschewing the value-added elements of being connected to customers by having SnapShot users send the OBDII module back to Progressive after six months.

The other market leader, Octo Telematics, has also taken a hardware approach, which it has modified and segmented for different audiences since its original launch nearly 10 years go.  But even Octo is seeing only tens of thousands of new users every month, not enough to achieve mass market participation.

The Solution

The time has arrived for an existing market participant or new entrant to move its entire business model over to connected, UBI insurance.  An opportunity exists for a supplier to shift to an OBDII-for-all approach, slicing through the segmented and fragmented insurance offerings for a monolithic program based entirely on connectivity.

The key to the success of such an offer will be the creation of a community of users connected via portal and mobile app where traffic and weather information can be shared and driving ability can be competitively evaluated.  The company offering such a program might also offer vehicle repair and new car shopping services as well as comprehensive service history and cost of vehicle ownership insights.

Essential to the success of such a program will be the OBDII device which will have to be given away or subsidized as well as professionally installed – although DIY installation may be allowed.  The objective of such an offering will be to offer value added services  on top of the insurance discount and skim off all insurance customers will to opt into an information sharing based value proposition.

This NewBI program offering will be designed to match any non-connected comparable insurance offer with the idea in mind that the value of the data gleaned from and shared with participants will generate additional added value for auto and non-auto-related insurance and non-insurance products and services.  More than one research organization has forecast a market of more than 100M UBI subscribers within three years.  This is the only feasible roadmap to achieving that level of adoption.

 

Have incremental gains occurred?  Yes.  Volvo and Renault announced plans for UBI offers making use of on-board, built-in connectivity.  New black box solutions were also on offer from Cambridge Consultants and DrivenLower while smartphone-based offerings were discussed including MyDrive and DriveFactor among many others. 

 

But more bolder steps are necessary to move the market.  In the end, the battle is over control of the customer and if insurers fail to capitalize on this market window of opportunity, car makers will slam the window shut and seek to take direct control of the UBI proposition via the embedded modem.

 



May 9, 2014 14:34 rlanctot

It wasn’t supposed to be this way.  Ride sharing services like Uber, Lyft and SideCar were supposed to make the process of hailing a cab easier, faster and more transparent – in spite of the objections of regulators and existing taxi and limousine operators.  But in China, they may be making it harder (for some) and more expensive (for all).

In the U.S., Uber, Lyft and SideCar are battling their way into the market city by city and airport by airport with varying results (Ridesharing Makes Friends in Some Jurisdictions, Enemies in Others - http://tinyurl.com/luhfs5e).  In Europe, Brussels, Paris and Berlin have put roadblocks in the path of these offerings to preserve local taxi driver hegemony.

But in China, taxis are welcoming these services as they are helping to boost fares, although at the expense of the linguistically, technologically or chronologically challenged.  Two dominant app-based services have emerged in China, Kuaidi and Didi, thanks to a money burning competitive struggle between Tencent and Alibaba which has contributed to the early exit and failure of 40 competing companies.

Didi is supported in part by Tencent (known for popular QQ and Wechat services) and a total of 100M RMB in venture capital and Kuaidi (with major investor Alibaba) has a similar amount of support.  While fighting for shares of the taxi ride market - and paying drivers to participate - they are also vying for control of the mobile payments market.

At the very beginning, the maximum subsidy a taxi driver can get for a single deal is 100RMB, typically the taxi driver can get 10-20RMB for one order and the passenger can get 10RMB for one trip.  Now if the passenger use Didi and pays with Wechat, he or she can still get 3RMB and the taxi driver can get 5RMB.

In the end, the battle is ultimately between Wechat and Alipay with taxis and their customers caught in between.

In China, taxi drivers and their customers have rapidly adopted these applications.  So, rather than private citizens getting into the taxi driving business, taxi drivers are using the apps to find customers.  It is worth noting that in some U.S. metropolitan areas, such as Washington, DC, cab drivers have either fought the ridesharing services, quit driving taxis in order to dive entirely into the ridesharing business, or have chosen to split their time between driving a taxi and privately offering rideshares.  And some cab drivers have taken to using apps to find fares in the U.S. and elsewhere.

At the same time, some municipalities, such as New York City, have tried to limit the use of apps to hail cabs – something Paris is also attempting to do.  In Beijing, taxi drivers are supposed to only use one of the hailing applications.

But in China, taxi drivers have adopted the apps to find customers and now customers seek out taxi rides by bidding - offering commissions - for their rides.  In effect, cab drivers, many of whom are using both Kuaidi and Didi simultaneously, are using these apps to bid up the cost of rides.

This is great news for cab drivers considering that taxis are notoriously inexpensive in China - $30 for an hour-long ride to the airport.  But this is a mixed blessing for taxi customers.  A colleague and a friend acknowledged during a recent visit to Asia that using the new apps is essentially the only way to catch a cab for which it is assured that a premium fare will be paid.

The services practically guarantee a pick up from anywhere to anywhere, but they also practically guarantee that the passenger will pay a premium. In fact, the apps guarantee that the customer will have to bid for a ride – escalating the amount of the commission in 5RMB increments until a taxi agrees to the fee and the pickup.

Considering that it is often difficult to get a cab ride in some areas of some cities, the availability of the app is a very good thing.  The bad news is that the use of an app on a smartphone in the local language means hailing cabs in China has just been made more difficult for any potential customer that either lacks a smartphone or cannot read or write Mandarin – which means the poor, elderly and tourists will have a rough go of it.

It also means cab drivers may be more selective about when they work, focusing their driving around high opportunity hours when they are most likely to obtain high fares.

The problem is being attacked at the city level in China, not unlike the way it is being combatted outside the country.  Of course, since it is China, it means every new local rule or restriction brings with it differing degrees of cooperation from the cab drivers.

The net result is that cab drivers will start making a better living in China and foreigners will become more dependent than ever on hotel concierges and local acquaintances to arrange cab rides.  Chinese consumers – young and old – that use cabs and lack a smartphone will be compelled to get one.  And the first taxi app developer to offer an English language version will gain a significant competitive advantage.

It is an interesting trial run for a very specific taxi hailing app model and one that favors actual cab drivers over ridesharing amateurs.  Hopefully the unintended negative consequences will not prove fatal to the broader acceptance of the concept.


May 4, 2014 16:00 rlanctot

This is like one of those chocolate/wine/marijuana (pick one) is good for you stories. It contradicts everything your mother ever told you - but that your dad told you was true.

A senior executive for a usage-based insurance company approached me recently with a quandary. He said his customer data showed that driving behavior improves with mobile phone use. This executive wanted to know if I had seen anything similar elsewhere and he was very hesitant about sharing what he regarded as highly controversial information.

The executive talked about this information as if he were Edward Snowden in possession of NSA secrets and in need of diplomatic immunity and a safe haven. This is no surprise, as the hysteria surrounding distracted driving has led to an almost universal condemnation of the use of mobile phones in cars, even in a hands-free fashion.

The irony to this executive’s finding is the fact that properly conducted research into the use of mobile phones during driving has shown driving behavior impacts to be virtually indistinguishable from driving without a mobile phone. In the words of a well-known study co-authored by my colleague, Chris Schreiner, during his time working in human factors at OnStar:

“We conclude that for personal conversations using a hands-free embedded device, the risk of an airbag crash is somewhere in a range from a moderately lower risk to a risk near that of driving without a recent personal conversation.”

  • Real-World Personal Conversations Using a Hands-Free Embedded Wireless Device While Driving: Effect on Airbag-Deployment Crash Rates – Young & Schreiner (2009)

OnStar’s use of personal minutes – wireless hands-free phone calls made via the embedded OnStar module – was the earliest form of hands-free calling. The results of this study – derived from an analysis of 91M hands-free calls from an average of more than 300K drivers per month over a 30 month period and representing 276M driver-minutes – have been borne out by studies such as the Virginia Tech Transport Institute naturalistic driving study and others.

Dozens of contradictory studies, using non-naturalistic methodologies, have fueled the anti-smartphone, driver distraction debate – as have statistics attributing thousands of highway fatalities to the use of smartphones. At issue is the claim that hands-free calling is as distracting as handheld calling. At stake is allowing consumers to use their mobile phones in moving vehicles.

Opponents of any mobile phone use in cars, a large and strident constituency with the ear of regulators, want to see hands-free phone use conflated with handheld use because handheld use has a significantly higher distraction factor. These groups rely on the findings of studies that almost universally focus on workload management analysis requiring un-natural tasks being performed during driving on the road or in a simulator.

These groups also trumpet claims of fatalities attributable to mobile phone use in the range of 1,000-3,000 in the U.S. and many thousands more around the world. Of course, it is difficult to know what kind of mobile phone use is implicated in each of these fatalities, but the numbers alone are enough to impel a call for a smartphone ban in cars.

The U.S. is pushing for individual states to enact laws requiring hands-free technology when making phone calls from mobile phones in cars. This is in line with regulatory activities in Europe and Asia, though enforcement varies widely.

It does make sense to ban the touching of mobile phones while driving – as most European countries have done – but there are those that will not stop until all mobile phone use in the car is restricted, banned or jammed. This would be a mistake, as multiple studies have shown.

The latest steps in the U.S. include the second round of VTTI’s study and mobile device UI guidelines from the US DOT. We won’t have the results of the second VTTI naturalistic study probably until the beginning of 2015. And the US Department of Transportation’s National Highway Traffic Safety Administration guidelines for the use of mobile devices in cars is not expected until the end of 2014.

Researchers do agree that texting and driving is distracting and ought to be banned. But hands-free calling may actually have a prophylactic effect. That is the controversial indication in the data – drivers have fewer accidents when talking on their mobile phones.

This is not to say that mobile phone use while driving is something to be encouraged. It is suggesting, though, that drivers are either deciding on their own to make calls primarily when it is safer to do so, or they are compensating with a higher state of vigilance when talking on the phone.

It is worth noting, in the words of one researcher, “When the driving demands are low, it is actually very difficult to devote all of our attention to the driving task.” In other words, a hands-free phone conversation could be acting as a stimulus to an otherwise inattentive driver helping to keep him or her awake and engaged in the otherwise boring driving task.

What precisely is causing drivers using mobile phones to demonstrate improved driving behavior relative to those not using their mobile phones remains unclear. One thing that is clear is that it is a controversial subject likely to continue to fuel debate and study. The important thing is that we continue to regard this as a debate and not a forgone conclusion as some in the driver distraction community would have it.

Maybe it is time to look at how many lives have been saved by smartphones in cars or how many might be saved with smartphones properly configured to alert the driver to contextual cues. Thankfully companies like TeleNav, HERE, INRIX, TomTom, Garmin, and Global Mobile Alert are all working on delivering those smartphone applications.


April 4, 2014 22:16 rlanctot
I am chairing the Telematics Update Content & Apps event in Munich on Tuesday and Wednesday, April 8th & 9th, next week  (http://tinyurl.com/6msselt).  The event looks at the opportunity to bring apps into cars and to enable remote control of cars via smartphones.  But with opportunity comes risk. 
A report from a blogger (http://tinyurl.com/pdrr8z6) highlights the minimal level of security provided for the Tesla iPhone app which allows remote locking and unlocking of the Tesla Model S.  There is no excuse for a company of Tesla's sophistication to leave such an inviting vulnerability in place.
The following commentary was written by Mayukh Gon, CEO and founder of PerfectCloud, a company that provides co-called identity-as-a-service, single sign on and data encryption for businesses.  I am sharing his thoughts as a courtesy in advance of the Content and Apps event:
Dear Tesla: Security is Not a Retrofit
The bedrock of a good life is security. From infancy through school, at work, at home, in our vehicles, in our online activities – we all want both physical and virtual security.
It was revealed last week that venerable automaker Tesla (you know, the one that designed and manufactured the $59,000 - $100,000+ electric Model S) had less-than-optimal security around the iOS app that lets Model S owners unlock their cars. The problem was an easily cracked password system that allowed persistent hackers to both find and unlock the high-end cars.
If the luxury Tesla has weak password protocols, what might that say about what’s in place in the less exotic vehicles driven by the rest of us?  What might that mean for drivers?
The Tesla mishap is a microcosm of much larger technology security concerns. 
As the auto industry moves closer to autonomous vehicles in the next several years, the security of the multiple systems needed for driverless vehicles should be an imperative. If someone hacks into a vehicle’s systems – more than just the lock system like in the Tesla -- what might the results be? Could a hacker remotely disable the vehicle? Could someone with ill intent cause a car’s airbags to deploy while the vehicle is operating on the highway? 
These types of security concerns are certainly not unique to automakers. Our lives are increasingly touched by automation and connectivity in our homes, at work -- everywhere. Security must be the bedrock rather than an afterthought.  Technologies exist today that remove the vulnerabilities by eliminating single points of failure.
Let’s not be those people who install alarm systems after being burglarized. That’s security as a retrofit, and it’s simply not practical in our increasingly connected world. 

April 4, 2014 14:50 rlanctot

The European Union has voted to end wireless roaming a move that is guaranteed to deliver a severe jolt of revenue growth for wireless carriers and ease the minds of car companies implementing telematics.  The plan, subject to review and set to take effect by Christmas 2015, will fundamentally change consumers’ relationships to their wireless carriers in a positive manner.

(According to the EU:  Member States will review the regulation and the Commission expects final agreement by the end of 2014.  The “Connected Continent” telecoms Regulation was proposed by the Commission in September 2013.  It aims to … end roaming charges and guarantee an open Internet by banning blocking and degrading of content, coordinating spectrum licensing for wireless broadband, giving Internet and broadband customers more transparency in their contracts, and making it easier for customers to switch providers.)

Once the decision, if upheld, takes effect it will cause consumers to no longer treat their phones like kryptonite when traveling across or near borders.  Usage of mobile phones and mobile Internet will blossom with the passing of the fear factor.

The decision will also wipe away many of the negative connotations associated with carriers.  One need look no further than the words of Neelie Kroes, European Commission vice president, in announcing the move:

“This vote is the EU delivering for citizens.  This is taking the opportunity to get rid of barriers to make life easier and less expensive.  Nearly all of us depend on wireless and Internet connections as part of our daily lives.  We should know what we are buying.  We should not be ripped off.  And we should have the opportunity to change our mind.  Companies should have the chance to serve all of us.  And this regulation makes it easier for them to do that.  It is win-win.  This vote puts us one step away from liberating one billion devices and every European.  With your support we are going to win this battle.”

These are certainly election year sentiments from the EU (with a tinge of Cold War imagery), but Kroes is correct to decry the consumer perception/experience of being “ripped off,” in her words.  And the “change our mind” comment suggests more changes in EU wireless regulations to come, perhaps along the lines of The Netherlands’ “blank SIM” legislation (CNET story: http://tinyurl.com/mrkdesx).

Just as iTunes expanded the market for audio content, rather than undermining it, the liberation of carriers and consumers from roaming charges will present a massive stimulus to the use of wireless networks – including telematics.  Tourists and natives alike will welcome and benefit from the change which will also stimulate the wider economy and likely give rise to new business opportunities.  Who knows, maybe the turnout for the upcoming EU election will get a boost as well.


April 2, 2014 11:46 rlanctot

Against the depressing tableau of General Motors and National Highway Traffic Safety Administration testimony before a U.S. House of Representatives sub-committee yesterday over the recent ignition switch recall two inspiring developments impacting vehicle design emerged. GM CEO Mary Barra noted to the panel GM’s consideration of bringing keyless, push-button start technology across its entire line up, and the Alliance of Automobile Manufacturers separately petitioned NHTSA to relax its requirement for a driver side and rearview mirrors.

The proliferation of push-button start technology will obviously remove the electro-mechanical causal element behind the ignition switch failure in question. If there is a single positive element that can emerge from the entire recall debacle this may be it.No mechanical switch, means no ignition switch failure – at least not a mechanical one.

The AAM request for NHTSA to relax Federal Motor Vehicle Safety Standard #111 is intended to enable car makers to replace the driver-side rearview mirror and the internal rearview mirror with camera-based systems. The AAM request coincided with NHTSA’s last-minute decision (in the face of pending legal action) to announce the implementation plan for the rear-visibility mandate.

AAM’s statement: http://www.autoalliance.org/index.cfm?objectid=BE3624F0-B8F3-11E3-AB0B000C296BA163

Removing the driver-side mirror has been suggested by the design of Volkswagen’s XL1 plug-in diesel hybrid which has opted for cameras over mirrors to reduce drag and weight. Tesla, too, with the Model X, has been pushing for this change and joined the AAM's petition. Neither the XL1 nor the Model X will be street legal in the U.S. under current regulations.

At the Geneva Motor Show in March, Nissan demonstrated a camera-based rearview mirror system turning the in-cabin rearview mirror into a display with a panoramic view to the rear of the car. The GM Authority newsletter has reported that GM “is in the process of securing a trademark for the word ‘THRUVIEW.’”

According to GM Authority, the automaker filed an application with the United States Patent and Trademark Office on Jan. 24, 2014 for a “motor vehicle rear view mirror that can also function as a display monitor to provide a panoramic rear view.”

On a less heartening note, yesterday’s hearing laid bare GM’s failure to resolve the ignition switch problem in a timely manner while NHTSA’s representative, David Friedman, blamed GM for failing to notify the agency of the problem. Consumer advocacy groups found fault with both GM and NHTSA. Both Barra and Friedman are freshman leaders of their respective organizations contributing to the inchoate feeling to the entire proceedings.

During the hearing members of Congress highlighted inconsistent communication between GM and its dealers and between dealers and consumers.  This is another challenge for Barra and GM to resolve.  In the midst of Tesla's challenge to the dealer model of selling cars, GM finds itself more dependent on dealers than it has ever been.  Perhaps this will lead to a re-evaluation of these relationships.

GM CEO Barra repeatedly referred in her testimony to the “new GM” emerging with her appointment and how the old cost-based culture – under which safety concerns were mitigated by cost issues - had been banished. Let’s hope NHTSA sees its own rebirth as a watch dog instead of a lap dog.